Budget hawks: Does US need to give gas and oil companies $41 billion a year?
Desperately seeking fiscal savings, Congress and President Obama are scrambling to find anything in the federal budget that can be thrown overboard, from child nutrition aid to funding for military bands.
To some budget hawks cutting subsidies to mature and profitable energy industries is an inevitable part of any budget deficit solution. "Clearly most of the attention has been focused on non-security discretionary budget,” says Steve Ellis, vice president of Taxpayers for Common Sense in Washington. “But even if we eliminated every dime of that, we would still have a trillion-dollar deficit. So these issues like subsidies for the oil and gas industry – and the tax code – are going to have to be tackled."
Finding and tallying federal energy subsidies, however, can be fiendishly difficult. Doug Koplow of the energy-consulting firm Earth Track in Cambridge, Mass., is considered one of the nation’s leading experts on the topic.
He estimates that the US spent between $49 billion and $100 billion on energy subsidies in 2007 – numbers Mr. Koplow says are still accurate if adjusted for inflation. The handouts cover a broad range of activities, from federal loan guarantees and funding for energy research and development to special tax exemptions.